Alexander Says Unfunded Mandates Cost State Government

Wednesday, January 9, 2013

Senator Lamar Alexander said in a speech before a joint session of Tennessee's 108th General Assembly,"the best thing Washington, D.C., could do to help Tennessee would be to stop imposing unfunded federal mandates that soak up your tax dollars and that take away your constitutional prerogative to make decisions on behalf of the people who elected you." He said that "unfunded federal mandates passed in the last 25 years will cost the Tennessee state government $371 million this year—enough money to reduce tuition by 25 to 35 percent for more than 178,000 college students in Tennessee.

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A full transcript of the speech follows:

You’ve heard a lot about “I’m from Washington, and I’m here to help you.”

Well, my message is a little different. I’m from Maryville, and I’m here to say that the best thing Washington, D.C., could do to for the state of Tennessee would be to stop imposing unfunded federal mandates that soak up your tax dollars and that take away your constitutional prerogative to make decisions on behalf of the people who elected you.

Now, before the Democrats worry that I may be starting a partisan speech, I want to say to you that this is a bipartisan problem. Sometimes Republicans in Washington are as bad as the Democrats. In my days as governor, I took a pretty dim view of Washington. And my pet peeve was that some member of Congress would get a bright idea, turn it into law in Washington, hold a press conference, take credit for it and then send the bill to me and to the legislature to pay for it. And the next thing you know, that congressman would be back in Tennessee at the Lincoln Day or Jackson Day Dinner making a big speech about local control. That was one of my pet peeves.

So, after two or three years of this, I went to the Oval Office and I asked for an appointment with President Reagan. I went to the Oval Office and said, “Mr. President, I have a proposal for a Grand Swap. You, Mr. President, take all of Medicaid, 100 percent of it, and we in the states will take all of K-12 education. We’ll just swap responsibilities. My reasons were, one, I thought education ought to be local. Number two: I thought Medicaid ought to have one boss. And number three: I was tired of people in Washington making rules that forced me as governor spend money on Medicaid that I’d like to spend on education.

Well, the president liked the idea. He recommended it in his State of the Union address, and of course, it went nowhere. Well, if we had adopted this Grand Swap 30 years ago, the states would have come out about $5 billion dollars better in the exchange—and then we’d have almost $100 million for Tennessee.

If that had been adopted 30 years ago, what would it look like today? States would be nearly $92 billion dollars better off if the federal government had taken over Medicaid, and we had taken over education. That would have meant $2 billion more dollars a year for you to consider what to do with. You could use it to lower taxes, reduce tuition costs, you could pay teachers more for teaching well with $2 billion dollars.

And over thirty years, it’s just gotten worse. It especially hurts our colleges, our universities and our schools. Because with less state support, the quality of our universities and colleges is not as good as it could be. And the tuitions are higher than they should be. Then, 30 years ago, the state paid 70 percent of the cost if you were a Tennessee student, and the student paid 30 percent. Today, it’s the reverse. Mandates are the main reason for that change. The governor’s budget office last year said that unfunded federal mandates imposed over the last 25 years cost the state of Tennessee $371 million dollars a year. $371 million is about one half cent on the state sales tax. With $371 million dollars this year, you could increase appropriations for higher education by 50 percent. You could reduce tuition at every college by 25 percent and at every community college by 35 percent.

Those are real dollars, and at UT, instead of $9,000, you’d pay $6,800. You’d see that nearly $3,700 tuition at Dyersburg State would be closer to $2,400 and the state would be paying 50 percent of the cost of the student’s education instead of 30.

But Medicaid mandates aren't the whole story. Take the right-to-work law. We’ve all been blessed living in Tennessee by the arrival of the auto industry. It’s spread to 85 of our 95 counties. One reason the auto industry came was because we had a right-to-work law, and every state north of us did not. But two years ago in Washington the National Labor Relations Board tried to take that away from us. by saying, in fact, it was against the law for a company, Boeing, to move from Washington state, a non-right-to-work state, to South Carolina, a right-to-work state.

Or take highways, I’ve noticed, and I bet you have, that they allow bicycles on roads that are so narrow in Tennessee that two cars can barely pass. And I was wondering, “Why in the heck are they doing that?” It was because there’s a federal mandate that says 10 percent of the federal highway funds have to be used for enhancements and so, they’re making narrow roads into bike trails. And don’t get me wrong, I like the idea of bike trails. One of my regrets as governor is that I didn’t get through a proposal that whenever you build a highway, we acquire a little extra right-of-way to build a hiking trail or a biking trail along the side, but I thought the state, not the federal government, should make that decision.

And I mentioned a little earlier, the bipartisan problem, this meddling is. Those on both sides of the aisle think a one-hour flight to Washington makes you smarter. Back when I arrived in Washington 10 years ago, Republicans were in charge of everything. And one in our party had the bright idea of Real ID. This was after 9/11, and Real ID created a new photo ID by Washington standards. The problem was that it would cost $11 billion dollars to do and most of the cost would have to be borne by the states. It took us until last year to get that worked out. Now, sometimes, even conservatives, as well as liberals in Washington, say, “Well, if you let states do it, they might not do what we want them to do.” Well, my friend, the economist Art Laffer, had this saying a lot. He said, “In our constitutional federal system of government, states have a right to be right and states have the right to be wrong.” Do I think that the country would be better off if every state did not have an income tax and did have a right-to-work law? Yes, I do, but I don’t think we ought to have a federal law requiring that. If Kentucky wants to have an income tax and not have a right-to-work law and the auto industry wants to come to Tennessee instead, Kentucky has a right to be wrong in my opinion. That’s our constitutional federal system.

Now, what does that say to me about how I should do my job? Well, first, I’m going to introduce in the United States Senate legislation to enact the Grand Swap that I proposed to President Reagan in the 1980s. The federal government takes all of Medicaid and the states take an equal amount of programs more appropriately funded and managed at home, such as education and such as job training.

Second, I’m going to reintroduce legislation that will move decisions from Washington to Tennessee, decisions about how we measure whether a teacher of a school are succeeding or failing. The last thing we need is a national school board making those decisions.

And third, there are some of you who have been here long enough to remember that I had bloody war with the National Education Association as governor about whether we ought to pay teachers more for teaching well. Tennessee became the first state to do that. Now, there’s people that say we should make everybody do that. I’m not for that. I think teacher evaluations of kindergarten through 12th grade education are a good idea, but I don’t think Washington ought to mandate or tell Tennessee how to do it. It’s hard enough to do without a federal employee peering over my shoulder of the local school board.

Fourth, I am going to continue to push something called the Marketplace Fairness Act, which is of great importance to Tennessee. This bill simply says that you have the right to decide whether you will collect state and local sales tax from all of the people who owe or from some of the people who owe. Now I think I know how I would vote if I were you and I had that decision to make, but I think you should decide it. Some of my Republican friends might say, “Well, they might spend it the wrong way.” But what I say is, “Look, I trust Governor Haslam and the lieutenant governor and the speaker and the Tennesee legislature to make that decision more than I trust Washington, D.C.”

And finally, I am going to do my best to get rid of something called the Maintenance of Effort Provision. You may not have heard of it, but every time Congress passes a federal aid law of some kind, they put a little provision in there that if you take any money, the state has to spend the same amount of money or more next year. All that does is transfer decisions about how to spend state tax dollars from Tennessee to Washington, D.C. If we keep doing that, we don’t need the 108th General Assembly.

Several years ago, when Senator Howard Baker was first elected, he made a speech on the Senate floor and other senators would come listen. And at that time, his father-in-law, Senator Everett Dirksen, was the Republican leader came too. Senator Baker's speech was long, maybe 45 minutes. And Senator Baker said to his father-in-law, “Senator, How did I do?” And Senator Dirksen said, “Howard, occasionally, you might try to enjoy the luxury of an unexpressed thought.”

Howard Baker said since then he has learned to become an eloquent listener. I think that would be pretty good advice for Washington. We could do a little less talking and a little more listening, especially with Tennessee. I’ll give you an example, a couple years ago, our state highways engineer was testifying before the Public Works Committee in Washington. And Senator Boxer of California, who was the chairman, kept trying to loan him some federal money. And finally he said “Madam Chairman,”—he was a very respectable guy—he said, “We don’t want to borrow any of Washington’s money. Tennessee has zero road assistance.” And there was just stunned silence. And Senator Boxer said, “I don’t think I’ve ever heard of that before.” Of course, she’s from California and they wouldn’t know about not having debt.

But the fact of the matter is that was because Tennessee made a solution in the 80s that was very different than other states had made. People might have said, “Well, Tennessee was wrong about this. “ Because we knew we wanted better roads, we knew that would bring in auto suppliers; we knew it would spread them out across the state. But everybody was borrowing money, bonding money to build roads. Democrats and Republicans then said, “Why don’t we pay for it as we go?” Let’s do it conservatively, which meant raising gas tax, which we did, with almost no negative results for anyone except those who had voted against it.

What’s been the result? We have one of the best four-lane highway systems still today. We have saved millions of dollars in infrastructure. And our gas tax is substantially below the national average. It was a good decision. We were right about that, even though we had the right to be wrong.

Washington can learn from that, and it can learn from Dr. Marion Kainer. All of us were horrified—I know I was, and I’m sure you were—by the meningitis outbreak that killed many in Tennessee and infected others. It would have killed many more if it hadn’t been for the life-saving action of Dr. Marion Kainer of the Tennessee Department of Health who literally slept on her exercise mat in her office until she, working with colleagues at Vanderbilt, figured out where the problem was coming from. By identifying it, saved the lives of lots of people. She was working with a federal agency, the Center for Disease Control which did a good job of listening to state employees and did less talking.

There’s one final thing that Washington, D.C., might learn from you. I remember that I was elected governor of Tennessee, this state was about as Democratic then as it is Republican today, and so when I arrived in Nashville, a news media outlet from Memphis asked the Speaker of the House then—who was Ned McWherter—he said, “Mr. Speaker, Mr. Speaker – what are you going to do with this new young Republican governor?” And Ned said, “I’m going to help him, because when he succeeds our state succeeds.” And he did.

We had our arguments. We had our differences of opinion. He’d disappear with the Democratic caucus and I’d work with the Republican caucus. But in the end we’d work together and state incomes went up, and roads got built, and good teachers got paid more, and auto jobs came into Tennessee.

Not long ago, I went to the floor of the United States Senate and I repeated something that Speaker Harwell had said here. She said that all of us would do well to remember a few words we learned in kindergarten: “work well together.”

Well, I’m here to say that you have done that. I respect you for that. So do the people of Tennessee. And your example is a good example for those of us in Washington to learn from.

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